Although cryptocurrencies can seem like a novel way to earn income, crashes, scams, and schemes may dissuade you. Yet, there are ways to mitigate these risks before you engage in cryptocurrency trading strategies. So, you could invest in these cryptocurrencies while knowing that your assets are guarded.
Some of these practices, such as 2-factor authentication, are built upon the crypto security systems already in place. Meanwhile, other practices, such as assessments, leverage technology to alert you to any security issues.
This blog will list the best practices to protect your crypto from accidental and criminal losses.
What Is Cryptocurrency?
Cryptocurrency is a type of digital currency that you can trade online to speculate or make transactions. Unlike traditional currencies, which are controlled by a central authority, cryptocurrencies operate under decentralized control. In other words, the ones who control a cryptocurrency and its value are the collective of those mining and trading it.
Common Cryptocurrency Security Issues
The decentralized nature of cryptocurrencies means that they don’t have one fatal flaw that can destabilize all of them at once. Nevertheless, their security system has its own flaws due to their online nature, lack of education on digital assets, and criminal actions.
More specifically, cryptocurrencies have the following issues:
Pump and Dump Schemes
This scheme relies on individuals, such as influencers and media personalities, to inflate the value of a cryptocurrency. Once enough investors have bought the cryptocurrency, those who inflated its value sell their assets, leading to a crash in the value of the cryptocurrency. For example, reports indicate that Kim Kardashian received a $1.26 million fine for advertising EthereumMax with the hope of inflating its value.
Malware and Ransomware Attacks
A risk to cryptocurrency security is a program attack on your personal device. This program then steals your cryptocurrencies or locks them away by encrypting them and asking you for ransom to give the key to access them.
Fake Assets and Services
You might find fake coins and wallets on fraudulent websites. These websites use your login information to steal your cryptocurrencies or personal information. Even if the links on the website are legitimate, criminals can still use them to steal from you. In such cases, it is not the fault of, for example, Bitcoin security but rather the altered link.
Phishing
To gain access to your security keys and passwords, criminals will pose as cryptocurrency platforms. They will ask you for this information as part of their security process and then use this information to steal your cryptocurrencies.
Ponzi Schemes
Lastly, a Ponzi cryptocurrency scheme refers to when those managing this currency sell it and use your buying to pay off investors. Eventually, there will not be enough new investors to pay back current investors, and those still involved in the scheme will incur losses.
Best Practices to Secure Your Crypto
Despite the risks associated with cryptocurrencies, you can make your transactions safer. In particular, you can use the following practices to protect your cryptocurrencies:
1. Use a Password Manager
To start with, you should use a password manager. Usually, you should not write down your passwords, and they should all be complex and strong. However, if you have many of them, remembering them can be difficult. In those cases, you can use this manager to remember your password. Then, you will not need to compromise on password strength or write them down.
2. Set a 2-Factor Authentication
Another crypto security measure is the 2-factor authentication. This adds a layer to your transaction process, ensuring that someone with only your key cannot access your funds. Instead, they would need to have access to multiple of your devices, which hackers are less likely to have.
3. Install Wallet Security
Installing wallet security is one of the best practices. This type of security involves using multi-factor authentication, which minimizes the risk that anyone else has access to your secure wallet. It also requires you to safeguard your wallet by installing updates, securing cryptocurrency. In addition, you should check your control and user privilege settings to align with your specific needs and eliminate the chance that others using your devices will access your account.
4. Take an Assessment
You should assess your online presence to verify whether your personal information is accessible. Companies that offer this service check online databases and trading centers to see if any of your personal information is accessible. Then, you can change your passwords and private keys, protecting your cryptocurrency.
5. Educate Yourself on Cryptocurrency
Lastly, you should learn how cryptocurrencies work so that you can avoid scams. You should especially learn what is the original platform application, website, link, and email. Another important piece of information is how they communicate.
What Is the Best Place to Learn about Cryptocurrencies?
To learn more about online protection and crypto securities, you should use the CryptoCracker platform. On our platform, you will learn the basics of cryptocurrencies so that you can make informed decisions.
Moreover, you can use our platform to manage your cryptocurrencies, avoiding bad links and other scams. Plus, our recommendation tool will guide you toward the best cryptocurrency investment.
Final Note
Now that you know crypto security is built into the system, you can improve it by implementing best practices. The practices listed above ensure you remain in control of your private keys and passwords. They also offer advice on how to avoid scammers and hackers. With this information, you are now ready to trade cryptocurrencies.
Frequently Asked Questions
Is crypto really secure?
Cryptocurrencies are relatively secure because they rely on data encryption and are decentralized. When you trade cryptocurrencies, you have your own passwords and private keys to ensure no one else can steal your data. Nonetheless, you must be cautious to avoid attacks and scams that will steal this information from you.
Which crypto has the best security?
Bitcoin has the best security because it has a large network that is quickly growing. This minimizes the possibility of successfully altering one blockchain branch. This is because the cryptocurrency runs on a blockchain that has a permanent record which anyone can examine. In addition, every transaction is confirmed multiple times to avoid mistakes.
Who controls blockchain?
All users of a blockchain control it, so there is no specific central authority. This is because blockchains are decentralized. Meanwhile, those who buy the cryptocurrency running on a blockchain only own coins.